Commonwealth Bank Act 1920

Legislation au C1920A00043 Not in force Act

Legislation content

COMMONWEALTH BANK.

 

No. 43 of 1920.

An Act to amend the Commonwealth Bank Act 1911–1914 and for other purposes.

[Assented to 30th November, 1920.]

BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Short title and citation.

1.—(1.) This Act may be cited as the Commonwealth Bank Act 1920.

(2.) The Commonwealth Bank Act 1911–1914 is in this Act referred to as the Principal Act.

(3.) The Principal Act, as amended by this Act, may be cited as the Commonwealth Bank Act 1911–1920.

Commencement.

2. This Act shall commence on a date to be fixed by proclamation.

Repeal of Australian Notes Act 1910–1914.

3. The Australian Notes Act 1910–1914 is repealed.

Parts.

4. Section three of the Principal Act is amended by inserting, after the words “Part VI.—Issue of Debentures by the Bank.”, the following words:—

“Part VIa.—Issue of Australian Notes.

Division 1.—Preliminary.

Division 2.—Establishment of Note Issue Department.

Division 3.—Transfer of Existing Issue to Note Issue Department.

Division 4.—Issue of Australian Notes.

Division 5.—Offences in relation to Australian Notes.”

The Bank not to issue bank notes without authority.

5. Section eight of the Principal Act is amended by inserting after the word “not” the words “except as authorized by this Act”.

6. After section sixteen of the Principal Act the following section is inserted:—

Commonwealth officers transferred to Bank.

“16a. Where an officer of the Commonwealth Public Service becomes an officer of the Bank he shall retain all his existing and accruing rights.”


7. After Part VI. of the Principal Act the following Part is inserted:—

“Part VIa.—Issue of Australian Notes.

“Division 1.—Preliminary.

Definitions.

“60a. In this Part, unless the contrary intention appears—

‘Australian Note’ means a note issued in pursuance of the Australian Notes Act 1910–1914, or in pursuance of this Part:

‘Bank’ means a person or company carrying on the business of banking:

‘Bank note’ means a bill or note for the payment of money issued by a bank, other than the Commonwealth Bank, and payable to bearer on demand and intended for circulation:

‘Constable’ includes any member of the police force of the Commonwealth or of a State or of part of the Commonwealth:

‘the Board’ means the Board of Directors appointed in pursuance of this Part:

‘the Note Issue Department’ means the Note Issue Department of the Commonwealth Bank, established in pursuance of this Part.

No State notes to be circulated after commencement of this Part.

“60b.—(1.) From and after the commencement of this Part—

(a) a bank shall not issue, or circulate as money, any note or instrument for the payment of…

Overview

The Commonwealth Bank Act 1920 was enacted by the Australian Parliament to amend the Commonwealth Bank Act 1911-1914 and introduce new provisions regarding the issuance of Australian notes. This legislation addressed the need to consolidate and regulate the issuance of Australian currency under the Commonwealth Bank, replacing the previously repealed Australian Notes Act 1910-1914. The Act established a distinct Note Issue Department within the Commonwealth Bank, managed by a Board of Directors, to oversee the issuance, re-issuance, and cancellation of Australian notes. It specified the denominations of these notes, their legal tender status, and the requirement to maintain a gold reserve. Additionally, the Act introduced stringent penalties for offences related to the forgery, possession, and circulation of counterfeit Australian notes, as well as provisions for the confiscation of illicit forms and the marking of counterfeit notes. The policy objective was to ensure a stable and secure currency system under the control of the Commonwealth.

Scope and Application

The Commonwealth Bank Act 1920 applies to the Commonwealth Bank and any person or entity engaging in the business of banking, specifically in the issuance and circulation of Australian notes. It extends throughout the Commonwealth of Australia and its territories. The Act amends the Commonwealth Bank Act 1911–1914 to establish the issuance of Australian notes as a function of the Commonwealth Bank, replacing the previously repealed Australian Notes Act 1910–1914. The Act prohibits banks from issuing or circulating any notes issued by a State as legal tender. It mandates the establishment of a distinct Note Issue Department within the Commonwealth Bank, managed by a Board of Directors. The Act outlines the issuance, denominations, and legal tender status of Australian notes, the management of reserves, and the penalties for various offences related to the forgery, possession, and defacement of Australian notes. Additionally, the Act provides for the transfer of control over the Australian Note Issue to the Treasurer in times of emergency. The Act’s provisions may be further extended or modified through subordinate instruments.

Key Provisions

  • The Commonwealth Bank Act 1920 introduces significant amendments to the Commonwealth Bank Act 1911–1914, primarily concerning the issuance and management of Australian notes. Section 5 of the Act amends section eight of the Principal Act, ensuring that the Commonwealth Bank is not to issue bank notes without the authority granted by this Act. Section 6 introduces a new section 16a, ensuring that Commonwealth officers transferred to the Bank retain all their existing and accruing rights. The Act also inserts a new Part VIa (Issue of Australian Notes) after Part VI of the Principal Act, detailing the preliminary provisions, establishment of the Note Issue Department, transfer of existing issues, the actual issuance of notes, and offences related to Australian notes.
  • The Act imposes several obligations on the parties it governs. For instance, Section 60b(1) prohibits any bank from issuing or circulating any State-issued notes as money and declares such notes to be not a legal tender. Section 60c establishes a Note Issue Department within the Bank, managed by a Board of Directors as per Sections 60d and 60e. Section 60f mandates the transfer of all assets and liabilities from the Treasurer under the Australian Notes Act 1910–1914 to the Note Issue Department of the Bank. Banks are required to maintain records of bank notes issued or re-issued and not redeemed by the Bank, as per Section 60m, and to furnish returns of notes held, as stipulated in Section 60n.
  • The Act imposes severe penalties for breaches. For instance, Section 60b(2) imposes a penalty of up to Five hundred pounds for any bank contravening the prohibition on issuing or circulating State-issued notes as money. Various sections impose criminal penalties for offences related to Australian notes, including imprisonment terms ranging from one to fourteen years. For example, Section 60r imposes imprisonment for fourteen years for forging or uttering Australian notes with intent to defraud, while Section 60t imposes imprisonment for three years for making or possessing any form of Australian note without the authority of the Treasurer. Section 60w imposes a penalty of One hundred pounds, or imprisonment for one year, or both, for making or possessing a copy of an Australian note without the Treasurer's authority. Additionally, Section 60x imposes a penalty of Twenty pounds for defacing or disfiguring Australian notes.

Legal classification tags

Area of Law
Financial Law
Banking Law
Instrument
Act
Concepts
Definitions & Interpretation
Offence Provisions
Regulatory Standards
Enforcement Powers
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.